Here is an article from The New York Times Magazine about the tentative alliance between business and union leaders to provide universal health care to Americans. It focuses on the efforts of Safeway CEO Steve Burd, along with Service Employees International Union head Andy Stern and Oregon Senator Ron Wyden, to come up with a workable health care plan. The article takes a historical overview of the health care situation, touching on past trends that I have discussed before in this blog.

Dramatic medical advances in the 1920's pushed up the cost of health care beyond the reach of many patients, especially during the Great Depression. Franklin Roosevelt rejected including universal health care in his New Deal program, reputedly because he anticipated opposition from "organized medicine". Yet organized medicine itself pioneered group health insurance, through Blue Cross-Blue Shield type coverage plans. Inspired by the success of such plans, which were initially non-profit, entrepreneurs began to turn to health insurance as a profit-making activity. The cost of insurance inevitably rose. Organized medicine later introduced managed care - as in HMOs - to reduce costs, but when these, too, were co-opted or copied by commercial providers, costs started to rise once again.

When the Clintons attempted to introduce their own plan for universal health insurance, they sought the support of business leaders to help shoulder the burden by contributing to a universal health care fund. The U.S. Chamber of Commerce initially supported the plan, but opposition from small business organizations help shoot it down. Unlike large corporations, which had provided employee health care coverage in the past, small businesses often provided little or no coverage. For them to contribute to a mandatory universal fund would impose costs on them they had not been forced to absorb before.

Steve Burd, as CEO of Safeway, ran a "low-margin" business, a nationwide chain of grocery stores that required a minimum of overhead to survive commercially. Safeway was, in other words, a big corporation that faced the problems of a small business, which gave Mr. Burd insight into how the health care issues faced American businesses at both ends of spectrum. Burd concluded that universal health care was necessary all across the board, but that overly "generous" benefits should be replaced by slightly less coverage with more emphasis on fitness and prevention. According to the article, "even though employers would no longer be insuring their employees, they would get financial incentives to set up wellness and fitness programs, while employees would get insurance discounts for enrolling in them." This would reduce the tax on business to support universal health care for the poor, and help reduce the strain on the entire health care system. Employees, in the meantime, would receive the cash currently withheld to pay for corporate health benefits and spend it on private health care programs whose costs would be regulated by the government.

The plan introduced by Burd, Wyden and Stern remains leary of single payer health insurance. Nonetheless, the article concludes by stating that the single payer system may actually be more economically efficient than a multitude of private insurers. It would eliminate the need for marketing costs to remain competitive, as well as the duplication of administrative costs when all health care is provided by a single entity.

"What’s the One Thing Big Business and the Left Have in Common?" from The New York Times (Registration may be required)